Trump tariffs redraws export map: Where do Indian exporters win and lose?

Donald Trump' 27 per cent tariff on India may be better positioned compared to key competitors such as China, Vietnam, Bangladesh, and Indonesia. Here's how

India, the world’s 12th-largest exporter in 2023 with total exports worth $441 billion, now faces a 27 per cent flat tariff on all its exports to the United States. While this poses challenges for domestic exporters, India may be better positioned compared to key competitors such as China, Vietnam, Bangladesh, and Indonesia.

 

China, for instance, faces a 34 per cent tariff, while Vietnam is hit with a steeper tariff of 46 per cent. Both Bangladesh and Thailand face 37 per cent. The highest tariff of 49 per cent has been imposed on Cambodia, while Sri Lanka faces 44 per cent.  ALSO READ | Donald Trump unveils sweeping tariffs on all imports: Here's the full list

   

Automobiles and auto components

The US has introduced a 25 per cent tariff on imported automobiles, which could significantly affect major Asian automakers like Toyota, Honda, and Nissan. While India’s automobile exports will also be impacted, Indian exports to the US remain relatively low, with passenger and commercial vehicles accounting for just 0.13 per cent and 3 per cent of total auto exports, respectively. Tata Motors could face indirect consequences through its luxury car arm Jaguar Land Rover, which generates around 23 per cent of its revenue from the US market.

 

While India’s auto component exports to the US make up one-third of its total industry exports of $21.2 billion, they account for only 2 per cent of US auto component imports, far behind Mexico (39 per cent), Canada (13 per cent), and China (12 per cent).

 

The US accounted for less than 0.5 per cent of India’s overall car exports in 2023. The primary destinations for Indian car exports during this period were Saudi Arabia, South Africa, and Mexico.  ALSO READ | Explained: How will Donald Trump's reciprocal tariffs impact India?

 

Textiles

India’s textile sector stands to benefit from the new tariff structure as competitors like Vietnam, Bangladesh, and China face significantly higher duties. 

Country	US import duty
Vietnam	46 per cent
Bangladesh	37 per cent
China	34 per cent

 

Total textile imports to the US was $107.72 bn in 2024

Country	Share of US textile imports
China	30 per cent
Vietnam	13 per cent
India	8 per cent ($9.7 billion)

 

Additionally, the textile sector contributes only 2 per cent to India’s GDP, compared to 11 per cent for Bangladesh and 15 per cent for Vietnam, making India less vulnerable to external shocks in this sector.

 

Gems and jewellery

India remains a key supplier of gems and jewellery to the US, accounting for 12.99 per cent ($11.58 billion) of total US imports in this category. Competing exporters, including France, Italy, UAE, and Thailand, contribute much smaller shares, reinforcing India’s dominant position. Therefore, Indian exporters are likely to be hit hardest by the new tariffs in comparison to its competitors.

 

Agriculture

Basmati and non-Basmati rice, along with buffalo meat and wheat, are among the key agricultural exports impacted by the 27 per cent tariff. Despite the tariffs, India may enjoy a price advantage over competitors like China, Vietnam, Thailand, and Bangladesh in processed food items such as pickles, pulses, and spice mixes.

 

Compared to Mexico, India may lose its competitive edge as the country has a tax advantage. Under the US-Mexico-Canada Agreement (USMCA), compliant Mexican agricultural goods have tariffs between 0–5 per cent. Its geographic proximity to the US and lower shipping costs further enhance its competitiveness in fresh produce, meat, and packaged foods.  ALSO READ | Trump's 27% tariff on Indian exports: Who gains and who takes the hit?

 

Electronics

India exports $14 billion worth of electronics to the US, and the 27 per cent tariff will raise costs for these products. Despite this, India remains in a better position than Vietnam (46 per cent) and China (34 per cent). Mexico, however, continues to hold an advantage with its tariff-free access under the USMCA for compliant goods, though non-compliant products now face a 25 per cent tariff.

 

The ongoing negotiations for a bilateral trade agreement between India and the US could provide relief from these tariffs. Despite the new barriers, India remains better positioned than several of its key competitors, potentially making Indian exports more competitive in certain sectors.